Wave carries highest transit fares in state, analysis shows

Published: Saturday, April 6, 2013 at 7:00 a.m.

Last Modified: Saturday, April 6, 2013 at 1:13 a.m.

Wave Transit is trying to do more with less, and that might be leading to the highest transit fares in North Carolina, according to an internal analysis of eight transit agencies across the state.

A peer analysis conducted by the Wave staff concluded that the transit agency receives relatively low financial support from its primary government – the city of Wilmington – and, without a dedicated local funding source, passes much of its operating costs along to customers.

Kevin O'Grady, a Wave board member and a Wilmington city councilman, said finding the right mixture of taxpayer subsidy and fares is a challenge for the agency and its board.

“That's the balance that has to be struck,” O'Grady said. “How much do the riders pay versus how much will it be supported? Because all public transit systems are subsidized.”

In February, Wave hiked regular adult fares from $1.50 to $2 and altered its routes, causing a loss of about 14,000 riders on fixed routes – or 9.5 percent – in comparison with February 2012.

The $2 fares are the highest in the state. Greensboro Transit has $1.50 fares, but the other six agencies studied have $1 fares.

“Continued escalation in passenger fares threatens to jeopardize the ability of Wave Transit to provide affordable public transportation to its core demographic which is the transit dependent,” the report says. A reduction in overall ridership threatens the system's efficiency by leaving valuable seats unfilled, it concludes. Some of the state's transit agencies have found other funding sources.

In Orange County, for instance, a half-cent sales tax on select items is used to pay for transit, while Asheville uses a $5 vehicle registration fee to help offset costs and keep fares low.

“Without a vehicle registration fee, without any kind of dedicated local funding source, really the only thing we can change is the amount of service we put on the street or how much we charge for the service,” said Albert Eby, Wave Transit's executive director. “It's not something we're proud of, that we charge the most in the state, but we feel it's responsible.”

Wilmington's $1.175 million general fund contribution to Wave in financial year 2011 was the lowest percentage-wise of the eight transit agencies studied, representing 16 percent of the transit authority's budget and 1.38 percent of the city's budget.

The contribution was sufficient for Wave to continue the service it has now, in part because the agency is using its funding efficiently, with the lowest expense per revenue hour and expense per revenue mile among its peers.

“We're trying to work to show that the organization is more efficient and economical, especially when it's impacting local dollars,” Eby said.

That's fortunate, O'Grady said, because the city is helping the agency the best it can. “I can tell you that the city of Wilmington doesn't have additional money available to subsidize it,” he said.

<p><a href="http://www.starnewsonline.com/section/topic9963"><b>Wave Transit</b></a> is trying to do more with less, and that might be leading to the highest transit fares in North Carolina, according to an internal analysis of eight transit agencies across the state.</p><p>A peer analysis conducted by the Wave staff concluded that the transit agency receives relatively low financial support from its primary government – the city of Wilmington – and, without a dedicated local funding source, passes much of its operating costs along to customers. </p><p><a href="http://www.starnewsonline.com/section/topic77"><b>Kevin O'Grady</b></a>, a Wave board member and a Wilmington city councilman, said finding the right mixture of taxpayer subsidy and fares is a challenge for the agency and its board.</p><p>“That's the balance that has to be struck,” O'Grady said. “How much do the riders pay versus how much will it be supported? Because all public transit systems are subsidized.”</p><p>In February, Wave hiked regular adult fares from $1.50 to $2 and altered its routes, causing a loss of about 14,000 riders on fixed routes – or 9.5 percent – in comparison with February 2012.</p><p>The $2 fares are the highest in the state. Greensboro Transit has $1.50 fares, but the other six agencies studied have $1 fares. </p><p>“Continued escalation in passenger fares threatens to jeopardize the ability of Wave Transit to provide affordable public transportation to its core demographic which is the transit dependent,” the report says. A reduction in overall ridership threatens the system's efficiency by leaving valuable seats unfilled, it concludes. Some of the state's transit agencies have found other funding sources.</p><p>In Orange County, for instance, a half-cent sales tax on select items is used to pay for transit, while Asheville uses a $5 vehicle registration fee to help offset costs and keep fares low.</p><p>“Without a vehicle registration fee, without any kind of dedicated local funding source, really the only thing we can change is the amount of service we put on the street or how much we charge for the service,” said Albert Eby, Wave Transit's executive director. “It's not something we're proud of, that we charge the most in the state, but we feel it's responsible.”</p><p>Wilmington's $1.175 million general fund contribution to Wave in financial year 2011 was the lowest percentage-wise of the eight transit agencies studied, representing 16 percent of the transit authority's budget and 1.38 percent of the city's budget.</p><p>The contribution was sufficient for Wave to continue the service it has now, in part because the agency is using its funding efficiently, with the lowest expense per revenue hour and expense per revenue mile among its peers.</p><p>“We're trying to work to show that the organization is more efficient and economical, especially when it's impacting local dollars,” Eby said. </p><p>That's fortunate, O'Grady said, because the city is helping the agency the best it can. “I can tell you that the city of Wilmington doesn't have additional money available to subsidize it,” he said.</p><p><i></p><p>Adam Wagner: 343-2096</p><p>On <a href="http://www.starnewsonline.com/section/news41"><b>Twitter</b></a>: @adamwagner1990</i></p>